Advantages of a NNN lease?

[Jon Deavers]

I've been studying some REIT's business models lately and noticed the term triple net lease. I understand the definition of a NNN but I don't see the advantage to the lessee? It seems that they take on all the expenses of the property without actually owning it. Is that just so the lessee doesn't have to carry the debt or asset on its books and the rent just becomes an operating expense?

[Joel Owens]

Most corporate companies are not in the real estate business.

They want an accounting tax write off plus It frees cash for more growth and re-imaging of existing stores or building new ones. The focus is on the growth and returns of the business and not the land it sits on.

Occasionally a business will want to own the land instead if they see it as a very long term location 40,50 years etc.